Bezuidenhout and Commissioner of Taxation  AATA 799 (Australia)
23 November 2012
Posted by: SAIT Technical
By SAIT Technical
The Administrative Appeals Tribunal of Australia (Taxation Appeals Division) recently delivered its decision in the matter between Francois Bezuidenhout and the Commissioner of Taxation.
The taxpayer (Bezuidenhout)is a pilot who works overseas. He earned income from his foreign employer in the 2006, 2007 and 2008 years of income. The Commissioner says that income should be included in the taxpayer's assessable income in Australia. The taxpayer says the income is foreign income because he was a foreign resident at the relevant times. He says that income should not be taxed here.
The Commissioner adds the taxpayer is liable to an administrative penalty on the shortfall calculated on the basis the taxpayer was reckless in complying with his obligations. The Commissioner also declined to remit the penalty in whole or in part.
Was the taxpayer an Australian resident for tax purposes?
The taxpayer was clearly an Australian resident for tax purposes in the years of income. He migrated to this country in 2005 with his family from the United Kingdom where he had been living after leaving Zimbabwe. He arrived here on a business migration permanent resident visa. In the visa application, he indicated a desire to live in Australia. He has subsequently applied for citizenship (albeit in 2010, after the years in question). He has a sister who resides here and his wife and children resided here full-time throughout the years of income. He retained private health cover in this country and opened Australian bank accounts and held an Australian drivers' licence. He had an investment property here. He does not hold any assets elsewhere apart from a bank account in Jersey. The bulk of his remuneration from overseas employment was remitted to Australia to maintain his family.
He was clearly a resident within the meaning of s 6(1) of the Income Tax Assessment Act 1936 during the relevant years.
As therewas no basis for believing the taxpayer was a foreign resident, the Commissioner's view that the taxpayer acted recklessly is correct. The administrative penalty was therefore correct.
Click here to access the full decision.